plans, marketing strategies, and long term strategic plans for International Paper's Masonite division and wood products area. I find, based on the record and the extensive testimony of both Georges and Suwyn, as well as the deposition testimony of other Louisiana-Pacific and International Paper executives, that much of the allegedly confidential information suggested by International Paper as deserving protection from disclosure does not currently merit protection. See Scott Paper, 476 N.Y.S.2d at 317.
In the latter part of 1995, Suwyn had the opportunity to review business plans relating to International Paper's wood products and Masonite divisions as well as information generated by International Paper concerning the relative merit of International Paper's OSB siding in comparison with International Paper's hardboard siding products. Suwyn testified, and International Paper submitted no contrary evidence, that all of the "technology" discussed in the wood products business plan is "commercially available and being purchased from the outside." (Tr. 453). He also testified that the profit margins set forth in that plan, which is now over a year and a half old, are available with reasonable precision from outside sources. Suwyn took neither of these documents, nor did he take any other confidential documents, with him when he left International Paper. In the approximate 15 month period since his departure from International Paper, there is no indication that Suwyn has exploited any information that he may have gleaned from those plans, or intends to do so.
Likewise, much of the testimony relating to the confidentiality of the technology surrounding product areas under Suwyn's supervision was unconvincing. Although much was made of Suwyn's access to technology relating to the production of OSB, Louisiana-Pacific's principal product, and International Paper's silviculture techniques, plaintiff failed to establish that such technology was unavailable in the industry. Not only are the plans for building OSB plants commonly available, but the equipment for producing OSB can be purchased on the open market. Moreover, International Paper's Masonite Division, which produced OSB, has apparently abandoned the product. It is, therefore, difficult to conceive of the tangible harm that International Paper could suffer as a result of Suwyn's use or disclosure of OSB-related information obtained while he was an employee of the company. Likewise, it appears that silviculture techniques involve commonly used nonsecret methods, and were actually techniques that Champion shared with Louisiana-Pacific's senior foresters on a tour of Champion's forest lands.
International Paper further offers as evidence of irreparable harm a number of instances where it alleges Suwyn has, in fact, already used or disclosed International Paper's confidential information. As an example, International Paper cites to Louisiana-Pacific's identification of a company called Jeld-Wen, a competitor of International Paper in its highly profitable doorskin business -- an area of production that Louisiana-Pacific has yet to enter -- as a potential acquisition candidate.
The identification of Jeld-Wen is said to demonstrate that Suwyn, who had confidential information concerning International Paper's doorskin business (see Tr. at 200-01), is prepared to use that information to benefit his new employer. According to Suwyn's uncontroverted testimony, however, Louisiana-Pacific's investment banker, without any direction from Suwyn, presented Suwyn with a list of potential acquisitions, which included Jeld-Wen. Suwyn further testified that Louisiana-Pacific has no intention of acquiring Jeld-Wen or entering into the doorskin business.
International Paper further argues that Suwyn had access to propriety gene marker genetics research information which he has used to benefit his new employer. Suwyn testified that he determined not to allocate any of Louisiana-Pacific's research and development funds to this research as it is "really speculative." International Paper contends that it is precisely by not taking Louisiana-Pacific into this research area that Suwyn relied on knowledge gained at International Paper.
These examples of misappropriation and disclosure of "confidential information" simply do not present the significant level of irreparable harm necessary for the imposition of the drastic relief of a permanent injunction. Notwithstanding the fact that Suwyn took none of the allegedly confidential and proprietary information when he left International Paper, see Reidman Agency, Inc. v. Musnicki, 79 A.D.2d 1094, 435 N.Y.S.2d 837 (4th Dep't) (injunctive relief to enforce noncompete unavailable where defendant had returned confidential documents taken from former employer); Ivy Mar Co. v. C.R. Seasons Ltd., 907 F. Supp. 547 (E.D.N.Y. 1995) (defendants' stipulation that they would not use certain confidential information rendered issue of enforcement of restrictive covenant "moot"); Bijan Designer for Men, Inc. v. Katzman, 1997 U.S. Dist. LEXIS 1426, 1997 WL 65717 (S.D.N.Y. Feb. 7, 1997) (injunction denied for, among other reasons, lack of irreparable harm despite taking of confidential documents and violation of nonsolicitation agreement where defendant later returned the documents), much of that information was available through other sources in the industry. See Reed, Roberts Assocs., 386 N.Y.S.2d at 680 (where confidential information was readily discoverable through public sources, an injunction would not issue). Moreover, the passage of more than fifteen months since Suwyn's departure makes this type of information sufficiently old and stale that an injunction is unnecessary to protect it. See Scott Paper, 476 N.Y.S.2d at 317.
Arguing that it need not prove the "likelihood" of irreparable harm, International Paper points to a small body of cases for the proposition that a former employee's mere access to confidential information combined with the potential for disclosure to the new employer is sufficient to establish the irreparable harm necessary for injunctive relief. See, e.g. Lumex, 919 F. Supp. 624; Continental Group, Inc. v. Kinsley, 422 F. Supp. 838 (D. Conn. 1976). International Paper argues that its burden of demonstrating irreparable harm is satisfied as it is uncontested that Suwyn had access to International Paper's confidential information in a number of areas directly related to the business he now manages at Louisiana-Pacific. As he "cannot eradicate . . . this confidential information from his mind," Lumex, 919 F. Supp. at 631, Suwyn would, unless enjoined, inevitably and inadvertently use that information in his efforts to benefit Louisiana-Pacific.
I, however, do not find the narrow line of cases advanced by International Paper to be inconsistent with the long standing proposition that irreparable harm be shown before injunctive relief may issue. In Lumex, the court noted that the presumption of inevitable disclosure was supported by evidence of a "high risk" of disclosure -- testimony that "it would be impossible for [the defendant] not to divulge confidential information." Lumex, 919 F. Supp. at 631. In addition, "evidence that there will inevitably be immediate disclosure of trade secrets . . . was adduced in cross-examination of [plaintiff]," id. at 631, during which he conceded that he could improve his new employer's equipment by using confidential information gained in his former employment. Here, apart from the Court's conclusion that much of the information that was available to Suwyn at International Paper is now stale, there was no such evidence that Suwyn would disclose that confidential information in his capacity as Louisiana-Pacific's CEO. Moreover, the Lumex court found that, because the particular industry involved -- the health fitness industry -- was a "'copy cat' or cloning industry," Lumex, 919 F. Supp. at 629, the confidential information at issue "would be greatly detrimental to the business interests of [the new employer]." Id. at 630.
The other cases cited by International Paper involved the potential disclosure of trade secrets by employees who had expertise in highly technical industries. See Kinsley, 422 F. Supp. at 841 (engineer in the field of "plastic container process development"); Business Intelligence Servs., Inc. v. Hudson, 580 F. Supp. 1068 (S.D.N.Y. 1984) (computer software). These courts, in granting injunctive relief on the basis of "potential" or "inevitable" disclosure, considered the then present state and nature of the industries at issue to determine whether the alleged harm would, indeed, be irreparable. Thus, injunctive relief was granted where the employee's knowledge would allow a competitor to improve its business with little or no effort, see Business Intelligence, 580 F. Supp. at 1072, or where the present and former employers were "endeavoring to develop the identical product" and the breaching employee had "learned exactly how [his former employer] was making the [product]," including all details concerning the production process, which refinements in the process were producing improvements and failures, and how near to success development efforts were. Kinsley, 422 F. Supp. at 845.
Here, the businesses at issue -- wood and building products -- are comparatively low-technology industries, and Suwyn's work at International Paper was driven by general managerial expertise as opposed to the application of highly technical, proprietary, or secret information. Even presuming that any proprietary technology existed, I find no evidence supporting a conclusion that Suwyn had or misappropriated any specific knowledge regarding such technology. Moreover, Georges acknowledged that he had no evidence that Suwyn had breached his confidentiality agreement with International Paper. Accordingly, I find that the level of risk that justified the grant of injunctive relief in the cases cited by plaintiff is simply not present in this case.
International Paper next contends that, even assuming that Suwyn had no knowledge of protectable information, the requisite irreparable harm has been shown because Suwyn's services as executive vice president of Forest Products were "unique." Court have held that, where an employee's services are truly "'special, unique or extraordinary' and not merely of 'high value to his employer,' injunctive relief may be available though trade secrets are not involved." Columbia Ribbon, 42 N.Y.2d 496, 398 N.Y.S.2d 1004 at 1006-07, 369 N.E.2d 4; see Reber-Friel, 682 F.2d at 385. In order to justify a enforcement of a restrictive covenant, however
more must . . . be shown to establish such a quality than that the employee excels at his work or that his performance is of high value to his employer. It must also appear that his services are of such character as to make his replacement impossible or that the loss of such services would cause the employer irreparable injury.
Reber-Friel, 682 F.2d at 390 n.9. Clearly, Suwyn's services cannot be so described. International Paper has adduced no evidence that it suffered any harm from the loss of Suwyn's services. Indeed, within a month of Suwyn's resignation, International Paper had reassigned all of his responsibilities to its current employees. As noted by the New York Court of Appeals in American Broad. Cos. v. Wolf, 52 N.Y.2d 394, 438 N.Y.S.2d 482, 486 n.6, 420 N.E.2d 363 (1981), "no New York case has been found where enforcement [of a restrictive covenant] has been granted, following termination of the employment contract, solely on the basis of the uniqueness of the services." See Reber-Friel, 682 F.2d at 390 n.9. This Court's research reveals none either.
In sum, International Paper has not demonstrated that absent an injunction barring Suwyn from working at Louisiana-Pacific it will suffer irreparable harm. See Reuters Ltd. v. United Press Int'l, Inc., 903 F.2d 904, 907 (2d Cir. 1990). This conclusion strikes with particular force where, as here, there is no evidence, despite the passage of time and despite the occurrence of extensive pre-trial discovery, of misappropriation by Suwyn of documents or data or any disclosures by Suwyn that can be said to constitute irreparable harm to International Paper or that support a claim for breach of fiduciary duties. See Mayo, Lynch & Assocs. v. Fine, 148 A.D.2d 425, 538 N.Y.S.2d 579, 580 (2d Dep't 1989).
For the reasons stated above, International Paper's application for injunctive relief is denied, and its claims against Suwyn for breach of fiduciary duty and against Louisiana-Pacific for tortious interference with contract are dismissed.
Barrington D. Parker, Jr.
Dated: White Plains, New York
June 19, 1997